Opinion
BK No.: 15-35358
04-13-2016
In Re: LB Steel, LLC Debtor(s)
Chapter: 11 FINDINGS OF FACT AND CONCLUSIONS OF LAW IN SUPPORT OF ORDER GRANTING FIRST APPLICATION OF PERKINS COIE LLP, ATTORNEYS FOR DEBTOR, FOR ALLOWANCE OF INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES
| TOTAL FEES REQUESTED: | $485,774.50 | TOTAL COSTS REQUESTED: | $5,654.71 |
|---|---|---|---|
| TOTAL FEES REDUCED: | $7,180.00 | TOTAL COSTS REDUCED: | $0.00 |
| TOTAL FEES ALLOWED: | $478,594.50 | TOTAL COSTS ALLOWED: | $5,654.71 |
The attached time entries have been underlined to reflect disallowance in whole or in part. The basis for each disallowance is reflected by numerical notations that appear on the left of each underlined entry. The numerical notations correspond to the enumerated paragraphs below.
(1) Improper Allocation of Professional Resources
The Court denies the allowance of approximately 50% of the requested compensation for the designated time of attorneys Daniel Zazove and David Gold in preparation of the Debtor's Schedules and SOFA. The Debtors have not provided any justification for the significant amount of participation from Mr. Zazove or Mr. Gold in such tasks. The Court believes that a professional with a lower level of skill and experience or a paraprofessional could have performed the tasks. In re Pettibone, 74 B.R. 293, 303 (Bankr. N.D. Ill. 1987) ("Senior partner rates will be paid only for work that warrants the attention of a senior partner. A senior partner who spends time reviewing documents or doing research a beginning associate could do will be paid at a rate of a beginning associate. [Citation omitted]. Similarly, non-legal work performed by a lawyer which could have been performed by less costly non-legal employees should command a lesser rate."); In re Wildman, 72 B.R. 700, 710 (Bankr. N.D. Ill. 1987) (same); In re Alberto, 121 B.R. 531, 535 (Bankr. N.D. Ill. 1990) (determining use of partner appropriate where attendant complex legal issues warrant highly experienced practitioner).
(2) Unreasonable Time
The Court denies the allowance of approximately 50% of the requested compensation for the designated time of attorney David Gold in preparation of the bar date motion in this case. The bar date motion was not a complicated or unique motion and the Debtor has not provided any justification for why such motion took 7 hours of Mr. Gold's time to prepare. The Court believes that Mr. Gold expended an unreasonable amount of time on this task in light of the nature of the task and the experience and knowledge of Mr. Gold. Pettibone, 74 B.R. at 306 ("The Court will determine what is the reasonable amount of time an attorney should have to spend on a given project... An attorney should not be rewarded for inefficiency. Similarly, attorneys will not be fully compensated for spending an unreasonable number of hours on activities of little benefit to the estate."); Wildman, 72 B.R. at 713 (same).
Enter:
/s/
United States Bankruptcy Judge Dated: 4-13-16 Prepared by:
The Chambers of The Honorable Janet S. Baer
219 S. Dearborn
Chicago, IL 60604 Perkinscoie INVOICE #: 5412638
LB Steel, LLC, Debtor
119236.0001.0001 / Administration of the Bankruptcy Case
| DATE | ATTORNEY/ASSISTANT | HOURS | DESCRIPTION OF SERVICES |
| 11/11/15 | D. Zazove | 0.60 | Call with M Goich regarding lien waivers and contract cancellation (.2);review contract to be prospectively waived (.3); discuss contract details withP. O'Malley (.1); |
| 11/12/15 | D. Gold | 0.60 | Review draft schedules (.4); email C. Blau regarding same (.1); telephoneconference with N. Saldinger regarding same (.1); |
| 11/12/15 | N. Saldinger | 1.80 | Review and input data for SOFA; |
| 11/16/15 | D. Zazove | 2.20 | Work on Schedules and SOFA; |
| 11/16/15 | D. Gold | 1.30 | Revise schedules and SOFA (.5); telephone conference with N. Saldingerand C. Blau regarding same (.5); conference with D. Zazove regarding same(2): telephone conference with P. O'Malley regarding same (.1); |
| 11/16/15 | N. Saldinger | 1.60 | Review and prepare SOFA 3.b and 3.c attachments (.6); correspondencewith D, Gold regarding issues pertaining to same (.2); research informationregarding same (.1); review ECF notices for change of information for SSABand orders entered by court (.1); update SOFA (.4); update master service listand service list for cash collateral orders (.2); |
| 11/17/15 | D. Zazove | 2.60 | Continue to work on schedules and SOFA(1.4);calls with client (.5) and P.O'Malley (X3)(.7) to go over some of the information; |
| 11/18/15 | D. Zazove | 3.30 | Revisions to schedules and SOFA; |
| 11/18/15 | D. Gold | 0.30 | Conference with N. Saldinger regarding schedules and SOFA (.3); |
| 11/18/15 | N. Saldinger | 3.60 | Conference with D. Zazove regarding SOFA (.2); update schedules perinformation sent by client and attorneys (2.3); prepare correspondence withlist of open issues related to schedules/SOFA to review team (.4); Conductresearch for schedules (.3); correspondence with D. Gold regarding same(.1); prepare signature pages of SOFA, schedules for execution by M. Goich(.2); correspondence to M. Goich regarding same (.1); |
| 11/19/15 | D. Zazove | 3.30 | Continue to edit and revise schedules and SOFA |
| 11/19/15 | D. Gold | 6.10 | Review and analyze Debtor assets for schedules and SOFA (4.4); revisesame (1.6); conference with N. Saldinger regarding same (.1); |
| 11/19/15 | N. Saldinger | 5.10 | Conference with D. Gold, C. Blau to review updates and open issues onschedules, SOFA (.7); conference with D. Zazove regarding open issues,revisions to schedules and SOFA (.3); update schedules, including reviewand preparation of equipment and vehicle lists as attachments, andamounts owed to all creditors, and SOFA, including addressing open issuesregarding pending and closed lawsuits (3.8); assemble revised schedulesand SOFA with remaining open issues listed for review by attorneys, debtorand CRO (.3); |
| DATE | ATTORNEY/ASSISTANT | HOURS | DESCRIPTION OF SERVICES |
| 11/20/15 | K. Crane | 1.00 | Review Statement of Financial Affairs (.6); conference call with DSI and thecompany regarding comments to and finalization of the SOFA; |
| 11/20/15 | D. Zazove | 4.50 | Revisions to semi final and final draft of schedules and SOFA (4.); calls withDSI, Debtor to go over changes and agree on final version (.5); |
| 11/20/15 | B. Heacock | 0.30 | Research Illinois Secretary of State online business listings for informationregarding seven LLCs requested by K. Crane (0.20); review email from K.Crane regarding forwarding information for invoices; prepare emailforwarding NRAI invoice for statutory representation to C. Blau at LB Steel,LLC (0.10): |
| 11/20/15 | N. Saldinger | 5.90 | Review latest revisions to schedules and SOFA with D. Zazove, D. Gold (.4);update schedules and SOFA per same, correspondence with C. Blau andCRO (3.6); prepare correspondence regarding final open issues onschedules and SOFA (.3); attend conference call with C. Blau, CRO andattorneys regarding final review/revisions to schedules, SOFA (.5); finalizeschedules and SOFA per same (.5); compare original top 20 unsecured withrevised top 20 based on schedules (.3); correspondence to C. Blauregarding same (.1); process schedules, SOFA with the court (.2); |
| 11/23/15 | K. Crane | 0.30 | Telephone conference with client regarding maintaining franchise filingsand registered agents; |
| 11/23/15 | D. Zazove | 0.10 | Email correspondence with D. Agay questioning the SOFA information. |
| 11/24/15 | N. Saldinger | 0.50 | Prepare shell of Form B26 related to LB Steel Acquisitions V (.5); |
| 11/26/15 | D. Zazove | 0.10 | Email correspondence with P. O'Malley to prepare for 341 meeting. |
| 11/30/15 | N. Saldinger | 0.20 | Docket relevant dates (.2); |
| TOTAL | HOURS54.10 |
| DATE | ATTORNEY/ASSISTANT | HOURS | DESCRIPTION OF SERVICES |
| 11/02/15 | D. Zazove | 1.60 | Review reclamation demand from Rattner Steel(.2); call with M. Goich todetermine what remains from Rattner at the time of demand(.1), reviewdebtor's response(.1) N. Levin, Rattner's counsel regarding same(.2); callfrom Welding Industrial Supply inquiring about critical vendor status(.2);calland Email with Ryerson's counsel, regarding a 553 setoff(.3); call with C.Blau re same(.1); review invoice schedules purporting to establish right ofsetoff(.4) |
| 11/03/15 | D. Zazove | 0.20 | Call with P. O'Malley requesting he verify Ryerson set-off and determine ifreclamation claim is covered. |
| 11/03/15 | D. Gold | 1.30 | Draft bar date motion (1.3); |
| 11/04/15 | D. Gold | 3.10 | Draft motion to set bar date (1.8); draft motion to employ a claims noticingagent (1.3); |
| 11/10/15 | D. Zazove | 0.90 | Review putative set-off agreement with Tube City(.7); call with creditor,Protection One, regarding debtor's account number(.1); emailcorrespondence with client and Protection One with same(.1) |
| 11/10/15 | D. Zazove | 0.20 | Call with S. McGiffert to discuss his client's copier lease with the debtorunder a different name. |
| 11/10/15 | D. Gold | 0.60 | Review and revise Tube City agreement (.5); telephone conference with M.Goich regarding same (.1); |
| 11711/15 | D. Zazove | 0.20 | Review revised Tube City set off agreement. |
| 11/12/15 | D. Zazove | 0.10 | Email correspondence with Ryerson's counsel regarding offsetting invoices. |
| 11/13/15 | D. Zazove | 0.10 | Email correspondence with Ryerson's counsel regarding terms of agreedset-off order. |
| 11/16/15 | D. Zazove | 0.80 | Work on Ryerson set off and agreed order modifying stay to allow same(.5);email with Ryerson's counsel to confirm that the setoff resolves itsreclamation claim(.1); call with K. Carlson wanting to revisit the utilityadequate protection order(.2) |
| 11/17/15 | D. Zazove | 1.50 | Draft PO termination agreement without penalty with S&J. |
| 11/18/15 | D. Zazove | 0.40 | Call from Kansas Dep. of Rev to inquire about post-petition tax obligationsand payments(.1); calls and emails with J. Gaslerra regarding S&J contractcancellation(.2) revise draft agreement(.1) |
| 11/18/15 | D. Gold | 0.30 | Draft Ryerson setoff motion; |
| 11/19/15 | D. Gold | 0.30 | Draft Ryerson setoff motion; |
| DATE | ATTORNEY/ASSISTANT | HOURS | DESCRIPTION OF SERVICES |
| 11/20/15 | D. Zazove | 0.70 | Revisions to Ryerson setoff motion and order( joint motion, stay relief,waiver of reclamation claim, payment of balance)) |
| 11/20/15 | D. Zazove | 0.60 | Revisions to claim bar date motion order and notice. |
| 11/20/15 | D. Gold | 1.50 | Draft motion to set bar date (.5); revise schedules and SOFA (.5);conferences with N. Saldinger regarding same (.2); conference with P.O'Malley, J. Gasbarra and C. Blau regarding same (.3) |
| 11/20/15 | D. Gold | 0.20 | Draft Ryerson setoff motion; |
| 11/20/15 | N. Saldinger | 0.50 | Attend kick off call with proposed claims agent Garden City Group (.5); |
| 11/23/15 | D. Gold | 1.10 | Draft bardate motion (1.1); |
| 11/23/15 | N. Saldinger | 0.40 | Revise joint motion of Joseph T. Ryerson & Son and Debtor to set off mutualobligations (.3); correspondence with D. Gold regarding exhibit (.1); |
| 11/23/15 | N. Saldinger | 1.00 | Review claims bar date motion (.2); prepare notice of motion (.1); review andrevise proposed order (.2); finalize motion and exhibits for filing (.3); processmotion with the court (.1); correspondence with GCG regarding service ofsame (.1); |
| 11/23/15 | N. Saldinger | 0.40 | Correspondence with GCG regarding local Rule 1009 and required notice toadded creditors (.2); telephone conference with D. Gold regardingpreparation and motions to be filed (.2); |
| 11/24/15 | D. Gold | 0.20 | Review comments from Committee on bar date and ordinary coursemotions; |
| 11/24/15 | N. Saldinger | 1.10 | Finalize and process motion for offset of mutual obligations with Ryersoncreditor (.3); arrange for courtesy copies of motions to U.S. Trustee (.1);telephone conference with I. Baumgarten of GCG regarding raw data forschedules in preparation of notice to creditors of claims bar date andcustomized proof of claim forms (.3); export data from Best Case softwarefor same (.4); |
| 11/30/15 | D. Zazove | 0.30 | Review Conway & Mrowiec secured proof of claim |
| 11/30/15 | D. Gold | 0.50 | Revise bar date order and notice (.3); email R. Ciambrone regarding same(.1); telephone conference with S. Wisotsky regarding his client's order (.1); |
| 11/30/15 | N. Saldinger | 0.50 | Correspondence with J. Callaby regarding service of amended utilities order(.2); correspondence with GCG regarding order related to Joseph T.Ryerson claim setoff (.1); review orders orders entered by the Court (.2); |
| TOTAL | HOURS20.60 |